February 21, 2020
The ESI Act was instigated with the intention of benefitting the factory workers and later on was made applicable to all organizations having 10 or more workers. As per statistics issued on March 31, 2016, the total beneficiaries of the ESI Act mounted to 82.8 million.
Employee State Insurance (ESI) is a social security provided to the employees in India with reference to the health-related incidents happening during the tenure of their employment. The fund management in ESI is executed by Employee State Insurance Committee (ESIC) and the rules are applied as per the rules and regulations insisted on ESI Act 1948. The ministry heading the ESI is the Ministry of Labor & Employment, Government of India.
Current Rates(w.e.f 01/07/2019)
In the recent years, there has been a predominant role played by Income Tax in ESI. As a result, we have today ‘Pehchan’ smart cards that come as part of ‘Project Panchdeep’. Apart from the ESU insured employees, underprivileged families are now eligible to benefit these ESI facilities enabled in ESI hospitals and dispensaries under ‘Rashtriya Swasthya Bhima Yojana’. There are also medical, nursing and paramedical schools in specific ESI hospitals run by the ESI Corporation.
The benefits offered to the employees as per the ESI Act is briefed and listed below:
Employees who have a monthly income of RS.21000/- or below are eligible for ESI benefits. Earlier the income limit was RS.15000/- and it was only in 2017 the new income limit of RS.21000/- was set.
The main element determining the ESI contribution is the Gross Monthly Income of the Employee or Employer. Gross Salary is that amount of the income before making any deductions and this includes the following sub-elements:
The contributing element however does not include Leave Encashment, Gratuity on Discharge or Retirement, Retrenchment Compensation, Washing Allowance and Annual Bonus.
There has been several time-to-time reforms made by ESIC and in the now, there has been a reformation brought to ESI policy. As per the new modification made, the cost of living index is climbing and in par with this issue, the 181st EIC meeting held in the mid-week of February 2020 decided to increase the prevailing confinement expenses amount from RS.5000 to RS.7000. This will facilitate pregnant ladies who are unable to benefit the ESI advantages from ESI hospitals and dispensaries and depend on other hospitals, because of pressing issues that they face.